Rio Tinto touts coal future over climate 'idealism'

By Angela Macdonald-Smith

March 21, 2014 — 3.00am

"Idealistic discussions" about climate change should be abandoned and Australians should recognise that coal will remain an important energy source for decades, according to Rio Tinto's head of energy, Harry Kenyon-Slaney.

Society needs to focus on technology to make power stations more efficient and to advance carbon capture and storage, because coal will continue to "do the lion's share of heavy lifting" to meet energy demand, the top mining executive plans to tell a Sydney conference.

Pressure is on the Coalition to weaken renewable energy targets.Credit:Joe Armao

"It is clear we can't just wish away fossil fuels," he will tell the Energy Policy Institute of Australia.

His comments come amid continued campaigning against coal and coal seam gas on the east coast, involving blockades of rail paths and drilling rigs.

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Rio Tinto on Thursday renewed its application for government approval for an expansion of a coalmine in the Hunter Valley, some four years after kicking off the process.

He says Australia has let its competitive advantage in energy slip away and is "facing a make-or-break moment" to set good policy in an upcoming government energy strategy paper.

Mr Kenyon-Slaney is backing modifications to the Renewable Energy Target, which is pushing up electricity costs. He also wants more government support for carbon capture and storage technology, in which Rio has so far invested more than $US100 million.

Former federal resources minister Martin Ferguson stepped up criticism of the Coalition government's emissions-reductions policies and called for the watering down of the renewable energy target, which he said was undermining the national electricity market.

"The RET is distorting the proper price signals that the NEM relies upon to attract efficient investment and to supply energy at the lowest cost," Mr Ferguson, who is now an adviser at the Australian Petroleum Production & Exploration Association, will tell the conference. Mr Ferguson's stance is a turnaround from his previous support for the 2020 renewable energy target while a minister in the Labor government.

He says his modified views are justified by the changes that have taken place in the energy sector, including the downturn in electricity demand.

Rio Tinto blames the renewable energy target for driving up power prices for all consumers and eroding profitability in a mining industry struggling with the strong dollar, higher taxes, increased regulations and delays in government approvals. Industrial electricity prices are about 50 per cent higher than the US or China.